John Chambers, CEO of Cisco, Blames Europe for Bad Quarter

Cisco Systems, Inc. (NASDAQ:CSCO) CEO John Chambers spoke with FOX Business Network’s (FBN) Liz Claman about Cisco’s third quarter earnings and what’s driving lower guidance. Chambers discussed what issues lie ahead in the future saying, “The first and most major is uncertainty in Europe” and “the second part is uncertainty on CEOs, not in the mid-size companies, but in the very large companies.”

“There are two issues. The first and most major is uncertainty in Europe and the fact that Southern Europe some of the challenges have spread to central and northern Europe and is that going to affect the rest of the global issue. The second part is uncertainty on CEOs, not in the mid-size companies, but in the very large companies that until they see more predictability in terms of what will happen in Europe and more predictability on some of the government policies, you see them not putting on the breaks, but you see them lifting their foot off the gas pedal to watch. It’s that uncertainty that we are sharing with the market.”

On the issues he’s concerned about in France:

“We saw decreases year-over-year in France and year-over-year Northern Europe. That’s the first time we’ve seen that. Unfortunately we tend to be a leading indicator of what’s bound to happen. That’s part of the reason you announce record earnings and are transparent about your concerns and the stock takes a major hit which kills you as a CEO when that occurs. I believe trust is everything, but think Europe as a whole will be tough for a while.”

On Cisco’s third quarter earnings:

“The quarter was extremely strong, record revenues, record earnings and income and we did exactly what we told the Street we would. We’re very proud of where we are and we tend to be very candid and honest to the best of our ability about what we’re seeing in the market as we move forward.”